New Delhil: Newcomer Reliance Jios latest offering is expected to compel incumbent operators to respond with aggressive counter-offers to retain their customers, turning-up the competitive heat in the sector, say analysts.
We believe incumbents would make comparable offers to their high-value subscribers even at the cost of short-term revenue loss. The three incumbents (Bharti, Idea and Vodafone) have sufficient 4G spectrum to compete against Jio, Deutsche Bank Markets Research said in its latest report.
The incumbent operators are likely to remain tactical in response, it added.
The three operators declined to comment. Billionaire Mukesh Ambanis Reliance Jio, on March 31, announced it had notched an unprecedented 72 million paid subscribers, and extended by a fortnight its deadline for migrating other subscribers to its paid offer.
It has further sweetened the deal by announcing a complimentary offer for three months to those who pay Rs 303 prior to April 15, thus offering data at rock-bottom prices.
Put simply, subscribers recharging prior to the said date using Jios Rs 303 plan (or any higher value plan) will get services for the initial three months on a complimentary basis, and paid tariff plan will kick-in only in July.
In its report, Citi Research said that it expects the competitive intensity in telecom sector to remain high.
The high conversion rate of Jios subscribers opting for the Prime offer is likely to force incumbents to react in order to reduce churn, especially at the mid-to high-end. Our checks had shown that while incumbents had introduced plans to counter Jio, these were not being marketed aggressively. This could now change, Citi has said
Be Part of Quality Journalism
Quality journalism takes a lot of time, money and hard work to produce and despite all the hardships we still do it. Our reporters and editors are working overtime in Kashmir and beyond to cover what you care about, break big stories, and expose injustices that can change lives. Today more people are reading Kashmir Observer than ever, but only a handful are paying while advertising revenues are falling fast.